|ZAGG, good year, maybe turned corner now:|
SALT LAKE CITY--(BUSINESS WIRE)--ZAGG Inc. (NASDAQ: ZAGG) (www.ZAGG.com), a leading producer of mobile electronics accessories including the popular invisibleSHIELD™ and ZAGGaudio™ brands, today announced financial results for the fourth quarter and full year ended December 31, 2009.
Revenue for the fourth quarter was $11.3 million, a 50% increase from the fourth quarter of 2008, and a 16% sequential increase as compared to the third quarter of 2009. Revenue for the full year was $38.4 million, a 94% increase from $19.8 million in 2008.
Gross profit for the fourth quarter was $6.1 million, or 54% of sales, compared to $3.8 million, or 52% of sales in the fourth quarter of 2008. Gross profit for the full year was $22.1 million, or 58% of sales, compared to $13.2 million, or 67% of sales in 2008.
Net income for the fourth quarter was $0.3 million or $0.01 per share as compared to net income of $1.1 million or $0.06 per share in the fourth quarter of 2008. Net income for the full year was $3.4 million or $0.15 per share as compared to net income of $2.1 million or $0.11 per share in the prior year.
During the fourth quarter, the Company took one-time charges of $1.2 million or $0.05 per share related to the following items:
* Notes receivable and related interest receivable of $0.7 million or $0.03 per share
* Reserves against accounts receivable of $0.4 million or $0.02 per share
* Inventory obsolescence reserves of $0.1 million
“We are very pleased with our record revenue growth again for 2009, and our continued acceptance in the retail channel with our flagship product, the invisibleSHIELD,” said Robert G. Pedersen II, President and CEO of ZAGG. “The Electronic Mobile Device accessories market is a huge opportunity for ZAGG, and we have made a firm entry into this sector with products that will take market share and serve the consumers’ needs.”
During the fourth quarter, we announced new distribution into Cricket’s retail stores, as well as a distribution agreement announced with T-Mobile in Germany for the invisibleSHIELD. T-Mobile is the exclusive seller of the Apple iPhone in Germany.
An important milestone during the quarter was our NASDAQ listing in early November.
As a part of our strategy to broaden our product offering, ZAGG released a new ZAGG audio line, ZAGGbuds and ZAGGsmartbuds in the fourth quarter. We also launched ZAGGskins, customizable invisibleSHIELD protection for mobile devices. The products were launched on the ZAGG website, and we are seeing good sell-through on both lines.
ZAGG continues to make progress with two initiatives announced before year-end: the ZAGGbox media center and HzO, a water blocking system for personal electronics that ZAGG has retained the exclusive marketing rights to; both of which are important to the long-term strategy of the company.
ZAGG considers earnings before other income or expense; income tax provision or benefit; impairment losses; depreciation and amortization; and share-based compensation expense related to stock and stock options (“Adjusted EBITDA”) to be important financial indicators of the Company’s operational strength and the performance of its business. These results should be considered in addition to results prepared in accordance with generally accepted accounting principles (“GAAP”), but should not be considered as a substitute for, or superior to, GAAP results.
A reconciliation of the differences between Adjusted EBITDA and the most comparable financial measure calculated and presented in accordance with GAAP, is presented under the heading “Reconciliation of Non-GAAP Financial Information to GAAP” immediately following the Condensed Consolidated Statements of Operations included below.
The difference between Adjusted EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, income tax provision or benefit, depreciation and amortization, impairment losses, share-based compensation and other non-cash charges.
Adjusted EBITDA for the fourth quarter of 2009 was $1.7 million or $0.07 per share versus $1.1 million or $0.06 per share in the fourth quarter of 2008. For the full year, Adjusted EBITDA was $7.3 million or $0.32 per share versus $3.0 million or $0.15 per share in the prior year.
A conference call will be held today at 5:00 p.m. Eastern Time to review these results. Interested parties can follow the call via the Internet at ZAGG’s Investor Relations page. The call will be available for replay for 30 days by dialing 1-877-660-6853 and entering account number 286 and call ID number 346764. A podcast of the event will also be available online or via Investor Calendar’s RSS feed.
For more information about ZAGG, please visit www.ZAGG.com.
Non-GAAP Financial Disclosure:
Investors are cautioned that the Adjusted EBITDA, or earnings/(loss) before other income/(expense), taxes, depreciation and amortization, impairment losses and stock-based compensation, and adjusted net income, or net income excluding amortization of intangible assets and share-based compensation expense related to stock and stock options, information contained in this press release are not financial measures under generally accepted accounting principles. In addition, they should not be construed as alternatives to any other measures of performance determined in accordance with generally accepted accounting principles, or as indicators of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that they fail to address. We present this financial information because we believe that it is helpful to some investors as a measure of our performance. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.